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New Orders Plummet, Price Pressures Build In US Services
Another swing, another miss.
June 4, 2025, will go down as a session during which two key US macro
Ttump must having trouble getting Xi on the phone.
I wonder what happened with “Trade wars are beautiful and easy to win”.
Well it’s a good thing Trump was so nice to Xi then. I mean, other than the fact that Trump is very tough on China and can easily win a trade war with them, his chickening out definitely is making him look super strong while whining about how tough Xi is.
But good news, now the Fed is gonna have to cut rates! The 4-D chess worked! Rates are cut, the economy is in stagflation, and the deficit will grow to fund 1%er tax cuts. Flawless execution.
LOL and Gross! about mustard packs and Zebra Cake. Hilarious pic in my head of the unsuited old ogre drooling on himself, crumbs and yellow stains everywhere. Thanks.
On a serious note, when the ‘leader” of the US economy believes bankruptcy is part of a good business strategy, then the country is at risk. Oh wait. Sacrificing the rule of law is also part of his strategy so, yeah, lots of risks many fat and happy Americans are ignoring.
He promised that he would run the country like he ran his companies!
We’ll all be increasing reliance on private data. https://www.wsj.com/economy/cpi-inflation-data-accuracy-8bd2a8ae
Zebra cakes (and spicy nacho doritos) were my faves as a kid. I’d eat nearly an entire box in a day. I’m just lucky I was very active or I would’ve been part of the growing trend of obesity in America. My zebra cake days are long over, but I still enjoy the occasional Christmas tree cake during the holidays.
Back to the topic at hand, we’ve been debating whether to expand our existing house as we’ve got kids sharing a bedroom right now (yes, they could survive sharing, but I wouldn’t mind a larger house). Based on the increasing construction costs and increasing inventory of existing houses, it seems the better decision may be to buy a new house while using the current one as a rental with the way things are heading.
What’s the risk you’ll buy the new house near the top of the market, while the old/rental house is a cash burner?
Realistically, we probably wouldn’t bother buying another house, and even if we did, it’d likely be in a couple years. I’m mostly just musing about a situation where the housing market does correct (which I don’t actually expect to happen). I’d say odds are 90% in favor of expanding existing home at some point, but it’s fun to speculate.
The initial impact of tariffs is inflationary as the new taxes raise prices. After that they become deflationary, as sales shrink, businesses contract, and then the lay-offs begin which leads to less buying power and even more deflationary pressure. That eventually hits tax revenues, and that leaves government even less able to help people. Trump could have ameliorated things by starting with negotiations first, beginning with smaller tariff amounts, or by using a more targeted approach. As I have commented before, he really has painted himself into a corner here. As we now know, every time he rattles his saber, the markets decline, bonds sell-off, and he is forced to back peddle. We are now just five-months into his presidency and he really seems to be running out of ideas on this already.
June will be interesting, because we’ll see more data reflecting post tariff conditions. May reported data largely reflected April, in some case the start of April.
Investors are impatient, we expect things to play out and show up in data quickly, while IRL things take time. Both good and bad.